February 24, 2021
Company name:
Representative:
Inquiries:
Tel:

ES-CON JAPAN Ltd.
Takatoshi Ito, President &Representative Director(TSE 1st Section, code: 8892)
Minoru Nakanishi,
Senior Managing Director+81-3-6230-9308

Notice of formulation of “IDEAL to REAL 2023”,
the fourth medium-term management plan
ES-CON JAPAN Ltd. (ES-CON JAPAN) announces the formulation of IDEAL to REAL 2023, the fourth
medium-term management plan, to cover the three-year period from the period ending December 2021
through the period ending December 2023, as outlined below.
1. Background and purpose of the formulation of the new medium-term management plan
With challenging economic conditions continuing due to the COVID-19 pandemic and the real estateindustry facing a business environment in which the future impact on the real estate market remains
difficult to predict, ES-CON JAPAN decided in July 2020 to cancel IDEAL to REAL 2022, its third
medium-term management plan covering the three-year period from the period ending December 2020
through the period ending December 2022.
Later, ES-CON JAPAN identified an excellent opportunity to proceed with further business expansion
and enhancements to management stability, based on the finding that the impact of COVID-19 on
Company business was relatively minor compared to initial expectations. ES-CON JAPAN consideredvarious options in search of the most effective means of capitalizing on this opportunity. As a result, as
noted in the separate news release “Notice of Issue of New Shares through Third-Party Allocation,
Partial Amendment of Articles of Association, (Planned) Change in Parent Company, and Conclusion of
Agreement on a Capital Tie-up with Chubu Electric Power Co., Inc.” issued today, ES-CON JAPAN
determined it could strengthen its financial standing through a capital increase realized by becoming a
consolidated subsidiary of Chubu Electric Power Co., Inc., which offers strong corporate credit. Thus, itestablished IDEAL to REAL 2023, a fourth medium-term management plan covering the three-year
period from the period ending December 2021 through the period ending December 2023.
2. Overview of the fourth medium-term management plan
(1) Basic management strategy policies(i) Establishing business foundations able to withstand unexpected changes in economic
conditions.
Establishing business and financial standings that would be sound and enable us to maintainour fund-raising abilities under any economic conditions.
(ii) Simultaneously changing the revenue structure and expanding business domains.
Transforming the revenue structure from one based on flows to one based on stock bystrengthening the real estate leasing business while at the same time realizing businessdiversification and expanding business territories.
(2) Basic policy: Transformation and Rapid ProgressTransformation◼ Proactive investment in long-term revenue-generating real estate and improving the structureof the balance sheet◼ Transforming the focus of management from flows to stock
Rapid Progress◼ Demonstrating synergies in the Chubu Electric Power Group◼ Achieving net sales of 110 billion yen and operating income of 16 billion yen (in the final fiscal
year of the medium-term management plan)1(3) Management strategies(i) Transformation to a structure of sustained and stable revenues(ii) Stable growth in existing core businesses through business diversification and area strategies(iii) Growing new businesses into core businesses through business diversification and area
strategies(iv) Taking on the challenges of new business domains(v) Enhancing synergies within the ES-CON JAPAN Group(vi) Expanding facilities, primarily in the five largest urban areas(vii) Enhancing synergies within the Chubu Electric Power Group(viii) Promoting ESG initiatives(4) Performance Plan
(Unit: million yen)
Results inperiod ended
December 2020

Projections forperiod ending
December 2021

Projections forperiod ending
December 2022

Projections forperiod ending
December 2023

Net sales

77,30880,00098,000110,000

Operatingincome12,202

10,80014,00016,000Stage of structuralreforms to balance
sheet andrevenues

Stage of setting
new record profits

Stage of further
rapid progress
through realizing
transformation

Projections forperiod ending
December 2021

Projections forperiod ending
December 2022

Projections forperiod ending
December 2023

14.2%

23.0%

24.0%

26.0%

21.2%

12.0%

13.0%

13.0%

6.6%

4.0%

4.0%

4.0%

Equity ratio

25.8%

29.0%

26.0%

23.0%

Share of long-term
earnings from realestate *2

9.5%

12.0%

14.0%

18.0%

38.6 billion yen

61.0 billion yen

66.0 billion yen

72.0 billion yen(5) Management targets
Results in period
ended
December 2020
Share of profits
from leasing *1
Return on equity(ROE)
Return on invested
capital (ROIC)

Net assets*1 Share of profits from leasing: Leasing segment profits/segment total profits (not including adjustments)*2 Share of long-term earnings from real estate: Real estate generating leasing revenues recorded as noncurrent assets/net assets

3. Dividend policy
In the press release “Notice on Review of Third Medium-Term Management Plan ‘IDEAL to REAL 2022’
and Progressive Dividend Policy,” issued July 30, 2020, ES-CON JAPAN announced a review of the
progressive dividend policy (a dividend policy that sets the dividend per share (DPS) for the previous
fiscal year as the lower limit and “does not decrease the dividend amount, but rather only maintains orincreases the dividend amount” in principle) it had maintained since November 2016. ES-CON JAPAN
has decided to maintain this progressive dividend policy from FY2020 and beyond.
During the period of this Medium-term Management Plan, ES-CON JAPAN plans to maintain dividendsof at least 38 yen per share.
Results for Results for Results for Results for Results forperiodperiodperiodperiodperiod
ended
ended
ended
ended
ended
December December December December December
2016
2017
2018
2019
2020

Projections Projections Projections
for period for period for period
endingendingendingDecember December December
2021
2022
2023

Dividend pershare

15 yen18 yen32 yen36 yen38 yen38 yen 38 yen 38 yen
or more or more or more

Payout ratio

25.5%

22.0%

30.2%

30.2%

33.9%

2

–

–

–

Link to new Medium-term Management Plan page
Link to press release“Notice of Issue of New Shares through Third-Party Allocation, Partial
Amendment of Articles of Association, (Planned) Change in Parent Company, and Conclusion of
Agreement on a Capital Tie-up with Chubu Electric Power Co., Inc.”

3

Fourth medium-term
management plan
FY2021 to FY2023

Table of contents

I.

Background of formulation of the fourth
medium-term management plan

P.3

II. Basic policy

P.4

III. Performance plan and Managementtargets

P.5

IV. Investment plan

P.7

V. Management strategies

P.8

P.6

P.22

I. Background of formulation of the fourth medium-term management
plan
External environment
COVID-19 pandemic
Promoting teleworking (work-stylereforms)
Continued market conditions
characterized by low interest rates

Internal environment
Becoming a Chubu Electric Powerconsolidated subsidiary
Diverse business domains in the generaldeveloper role, including condominium,
retail, logistics, and office development

Labor shortages attributable to shrinking
population of workers in their productive
years

major urban areas

Growth of e-commerce

Venturing into overseas markets

Venturing into the REIT market

Growing awareness of ESG and SDGs

Establishing business foundations able to withstandunexpected changes in economic conditions
Simultaneously changing the revenue structure andexpanding business domains

II. Basic policy
Realizing enhanced capital by becoming a Chubu ElectricPower consolidated subsidiary
Basic policy

Transformation and Rapid ProgressThree-year growthnarrative

2021

Stage of structural reforms to balance sheet and revenues

2022

Stage of settling new record profits

2023

Stage of further rapid progress through realizing transformation

Transformation

Proactive investment in long-term revenue-generating real estate and improving thestructure of the balance sheet
Transforming the focus of management from flows to stock

Rapid
progress

Demonstrating synergies in the Chubu Electric Power Group
Achieving net sales of 110 billion yen and operating income of 16 billion yen (in the
final fiscal year of the medium-term management plan)III. Performance plan and Management targets
Performance plan
Unit: 100 million yen

Results

Plans

2020

2021

2022

2023

Net sales

773

800

980

1,100

Operating income

122

108

140

160

Trends in sales and operating income plans
Stage of structural reforms tobalance sheet and revenues
Net sales

Stage of further rapid progress
through realizing transformation

Stage of setting new record profits

1,100

Operating income

Unit: 100 million yen

980
800

773

New record
high earnings

122

108

140

160

2020
2020

2021
2021

2022
2022

2023
2023

III. Performance plan and Management targets
Management targets
Results

Plans

2020
Share of profits fromleasing *1

2021

2022

2023
Conversion to earnings structure that expands share of profit

14.2%

23.0%

24.0%

26.0% from leasing

ROE

21.2%

12.0%

13.0%

13.0% Maintaining a high level of ROE even if it decreases, through

ROIC

6.6%

4.0%

4.0%

4.0% Promoting management conscious of continued efficiency

25.8%

29.0%

26.0%

23.0% Maintaining the same level of equity ratio

12.0%

14.0%

through proactive investments in long-term
18.0% Increasing
revenue-generating real estate

61 billion yen

66 billion yen

Equity ratio
Share of long-term
earnings from realestate *2
Net assets

9.5%
38.6 billion yen

capital enhancementseven in cases of decreases in ROIC

72 billion yen Increasing net assets through capital increase

Trends in KPIs

Trend in net assets

29.0%
26.0%

25.8%

26.0%

23.0%

610

21.2%

24.0%

14.2%

Unit: 100 million yen

Capital increase through third-party allotment

660

720

23.0%

14.0%

18.0%

13.0%

13.0%

4.0%

4.0%

4.0%

2021

2022

2023

386

12.0%
9.5%
12.0%
6.6%

2020
2020
Share of profits fromleasing

ROE

ROIC

Equity ratio

Share of long-term earnings fromreal estate

2021

2022

2023

IV. Investment plan

7

Gross investment amount over the three-year period of the medium-term
management plan: 220 billion yen
Transforming the earnings structure through more proactive investment in long-term
revenue-generating real estate
Share of long-term earnings
Expanding revenue-generating real estate Projected asset composition
attributable to real estate
approximately fourfold in three years
after three years
18.0%

Unit: 100 million yen

Cumulative amounts invested over three years(2021-2023)
2021

Increase in long-term revenue-generating
real estate as a share of gross assets

Unit: 100 million yen
Three-year2023
cumulative
total

2022

FY2020: 9.5%

1,920

Gross investment amount

550

700

950

2,200

Investment in revenuegenerating real estate

Share of long-term earnings
attributable to real estate

300

400

600

1,300

9.5%

50

100

150

300

Inventories

150

200

250

600

100

100

200

400

250

300

350

900

0

0

300

300

Investment in development ofrevenue-generating realestateInvestment in medium-term
revenue-generating realestate*Investments in long-term
revenue-generating realestateInvestments in otherdevelopment
Amount recovered
Net investment

Inventories

FY2023: 18.0%

885

550

700

650

Long-term
revenueLong-term
revenuegenerating
realestategenerating
realestateLong-term revenuegenerating real estate

550

141
Other
468

Other
600

Gross assets: 1,494

Gross assets: 3,070

2020

2023 projection

1,900* Real estate generating rental revenues, acquired while being leased to tenants andintended for sale after increasing its value

V. Management strategies(i) Transformation to a structure of sustained and stable revenues
Increasing the share of profits from leasing to 26% or higher
Trends in segment profits and share of profit from leasing(Share of profit from leasing: Leasing segment profits/segment total profits [not including adjustments])
Real estate leasing business

230

Real estate sales business
Real estate planning agency and consulting business

206

Share of profit from leasing

Total segment profits 167

161

23.0%
142

Unit: 100 million yen

109

24.0%

151

138

26.0%

50

61

2022

2023

14.2%
23
2020

37
2021

Achieving transformation to stable revenue structure byincreasing leasing profits to 26% of total segment profits

V. Management strategies(i) Transformation to a structure of sustained and stable revenues
Establishing a revenues structure wherein leasing segment profits cover total
general and administrative expenses
Trends in general and administrative expenses, leasing segment profits, and coverage ratio** Coverage ratio: (leasing segment profits/general and administrative expenses [excluding amortization of goodwill])

Leasing revenues

General andadministrative expenses

Leasing segment profits

Coverage ratio

95

Unit: 100 million yen

112

90%

82%

80
68

71%
55

61
52

61

50

45
37
23

51%
2020

2021

2022

2023

Increasing coverage ratio to 90% in the term ending December
2023 (final fiscal year of the medium-term management plan)

V. Management strategies(ii) Stable growth in existing core businesses through business diversification and area strategies(1) Condominium businessStable supply of 1,200 units in
FY2022 and beyond

Supply results and plans

1,062

1,200-unit line
476

539

2017

2018

648

652

2019

2020

2021

1,200
Le JADE Yamato-Takada Ekimae

2022

2023

2024 . . .

Targeting a stable supply of 1,200 units/year rather than simply increasing thenumber of condominium units
Diversification strategy
Developing condominiums
in harmony with the naturalenvironment
Launching condominium developments
on sites characterized by naturalabundance
OST RESIDENCE KARUIZAWA
Proposing new lifestyles such as
working vacations in addition to outdoor
and leisure life

Le JADE Urawa

Region-specific strategies
urban areas
In addition to ensuring a stable supply in the Kanto andKansai regions, beginning to supply properties in the
Chukyo region in 2021 and the Kyushu region in 2023
Plans to initiate condominium development in the
Hokkaido region at some future point

Le JADE City Hyotanyama

V. Management strategies(ii) Stable growth in existing core businesses through business diversification and area strategies
Diversification strategy(2) Retail facility development
New development of neighborhood shopping centers and retailsites and proactive investment in raising value
tonariebrand of retail facilities rooted inlocal communities

Promoting multiuse development

Promoting development of complexes combining retail, residential, andemployment functions, as typified by the Tsukuba Station integrated
development project
Tsukuba Station integrated development project

RetailResidential

Le JADE Tsukuba
Station Front

Officetonarie Tsukuba
SquareSolutions to social challenges

tonarie Toga-Mikita

tonarie Yamato-Takada

tonarie Q t Mog

Providing safe, comfortable living in local communities by fulfilling social
responsibilities in areas such as regional vitalization, local community
building, and health and welfare, all through urban development, in
response to low birth rates and an aging society

Region-specific strategies
Nationwide deployment
tonarie Utsunomiya

Efforts involving various retail sites across Japan, including thoseconnected directly to railway stations, in high population density areas, andin highly convenient roadside locations

tonarie Yokkaichi

V. Management strategies(ii) Stable growth in existing core businesses through business diversification and area strategies(3) Public REIT offering businessAs a sponsor firm, continuing to develop retail facilities and retail sites rooted in local communities and realizing
mutual growth by supplying properties to ES-CON JAPAN REIT
Properties with priority acquisition rights

Major properties already supplied

Pare Marche Nishiharu

tonarie MinamisenriLife Daisen

Fukuoka Kasuga Project

Retail facilities with roots in local communities

Retail sites

KoLuTeNa

Soyoca Fujimino

Retail facilities with roots in local communities

Welcia Mukomotomachi
Retail site

Mutual growth through cooperation with the Chubu Electric Power Group, our supporting company
Overview of trends and growth in ES-CON JAPAN REIT
investment targets

REIT

100 billion
yen

Providing know-how on
eco-friendly technologies
and energy cost savings

Asset recycling throughredevelopment support
ES-CON JAPAN REIT

Information pipeline

SponsorReal estate developmentknow-how

Information pipeline

Secondment to Chuden Real EstateSponsor support contract
4.8% same-boat investment
Granting of priority acquisitionrights/negotiation rights

Secured
R&I

Promoting joint projects in
the real estate business
Investing in 51.5% of voting rights
Appointment of director,
secondment to the ES-CON JAPANGroup

41.6 billion A- ratingyen

51.9 billion
yenSupporting company

25
properties

28
properties

Chubu Electric Power

February 2019

February 2020
After first capital increase
through public offering

Chuden Real Estate

Support contract
Warehousing

ListedMedium-termtargetV. Management strategies(ii) Stable growth in existing core businesses through business diversification and area strategies(4) Hotels business
Through January 2021, 17 projects had been developed (of which 15 were sold). Despite uncertainties related to
COVID-19, careful decisions will be made with regard to future developments based on the prospects of recovery
post-COVID of inbound tourism demand.
Properties soldNihonbashi Kayabacho
Opened December 2016
102 rooms

Horikawashinmac
hi, Kanazawa
Opened April 2018
121 rooms

Nihonbashi Bakurocho
Opened April 201763 rooms

Awajicho I, Chuo-ku,
OsakaOpened May 2018
168 rooms

Hiranomachi, Chuo-ku,
OsakaOpened April 2017
96 rooms

Awajicho II, Chuo-ku,
OsakaOpened June 2018
168 rooms

Sapporo, Hokkaido
Opened July 2017
144 rooms

Properties currently held

Oyamacho, Kanazawa
Opened December 201747 rooms

Kitakyuhojimachi, Chuo-ku,
OsakaOpened June 2018
182 rooms

Tsurunocho, Kita-ku,
OsakaOpened November 2018
134 rooms

Nagahoribashi Ekimae
Opened December
2018
96 rooms

Minamisenba III,
Chuo-ku, Osaka
Opened January 2018
100 rooms

Hayabusacho,
Chiyoda-ku
Opened April 2018
102 rooms

Awajicho III, Chuo-ku,
OsakaOpened February 2019184 rooms

Minamisenba I, Chuo-ku,
OsakaOpened April 2019
256 rooms

Hakatanakasu, Hakata-ku
Opened March 2020
103 rooms

Nishishinsaibashi,
Chuo-ku, Osaka
Opened January 2021
53 rooms

V. Management strategies(iii) Growing new businesses into core businesses through business diversification and area strategies(1) Logistics projects
The development of the first project under the LOGITRES Tojo brand is now complete. In October 2019, we acquired a development site in the same area
for a second project.
Efforts are underway in businesses involving logistics site and facilities development through a land readjustment project in the city of Koga in Fukuoka
Prefecture.
In light of the growing e-commerce market and growing demand for logistics facilities, our policy is to strengthen efforts in this sector as a potential newcore business.

brand of logistics facilities
supporting consumer lifestyles

Region-specificstrategies

Planned future logistics
projects

Suburban areas near highpopulation density urban areas

Hyogo Tojo II Project (tentative name)

Development on sites offering hightransportation convenience to serve
as e-commerce logistics facilities

Koga-shi Genboen Phase VI Project(tentative name)

LOGITRES Tojo (Kato, Hyogo Prefecture)(2) Rental apartments
Our policy calls for enhancing efforts in apartment development as a potential core business by drawing on our know-how in the condominium
business to develop apartments to meet various needs, including student apartments, company housing, and apartments for one-person households.

Region-specific strategies
Five major urban areas
Business development in sites offering convenient
commuting to work or school near railway stations
and office areas in the five major urban areas of
Kanto, Kansai, Chukyo, Kyushu, and Hokkaido

Planned future apartment projects
Suita-shi Tarumicho 3-chome Project (tentative name)
Taito-ku Kotobuki 4-chome Project (tentative name)
Taito-ku Taito 2-chome Project (tentative name)

V. Management strategies(iii) Growing new businesses into core businesses through business diversification and area strategies(3) Private REIT business
Venturing into the apartment market in which conditions remain solid despite future uncertainty
As a new initiative, plans call for forming ES-CON Private REIT (tentative name) as a private REIT toinvest mainly in apartments.
Drawing on development SPCs
Costs will be reduced and fund-raising risks lowered via special-purpose corporations (SPCs) intended to develop apartments for the private REIT, rather thanrelying solely on properties we develop.
ES-CON Private REIT (tentative name) will be granted priority negotiating rights on projects developed by the SPCs; it will also receive trust beneficiary rightsfrom SPCs following development.
ES-CON Asset Management, a Group member company, will be assigned to handle SPC arrangements and operations management, to enhance Groupearnings potential.
Development SPC scheme
Trustee(Trust bank)

Development
contract

ES-CONJAPAN
Business
partners
Construction
company
Designcompany

SPC

Trust contract

Development
contract

Construction
contract

Loan contract

Real estate
investment
trust
beneficiaryrightsDebt

Kamikitadai Ekimae ProjectFujisawa Development Project
Silent partnershipcontract

EquityDesign supervisioncontract

Projects on which ES-CON Private REIT (tentativename) priority negotiating rights will be granted

Financial
institution

Silent partnershipcontract

Keio Inagi Ekimae Development Project
ES-CONJAPAN

Odakyu Isehara Ekimae Sakuradai Development Project

Business
partners

V. Management strategies(iv) Taking on the challenges of new business domains(1) New businesses
Overseas business
Future overseas business plans
Condominium project in Bangkok, Thailand
Knightsbridge Sukhumvit-Thepharak PJ
Condominium development project in Los Angeles County,
California
520PJ(Tower 520 N.Central/Tower 521 N.Orange)

Tower 521 N.orange

Tower 520 N.Central

Sale of permanent ossuary usage rights
Sale of permanent usage rights
in the ossuary Ryomon Co.,
Ltd., located in Minamiazabu,
Minato-ku (total number ofshrines: 9,999)(2) Other new initiatives
M&As, alliances

Digital transformation

Large-scale urban development business
Promoting the large-scale urban development business inpartnership with the Chubu Electric Power Group
Accelerating initiatives that fuse energy andcommunity-support infrastructure with real estate businesses

V. Management strategies(v) Synergies within the ES-CON JAPAN Group
Enhancing the stable earnings capabilities of subsidiaries through ESdiverse development strengths
ES-CON JAPAN Group synergies
Securing stock revenues through operations
and real estate management

Enhancing businesses in the Kanto region
and the single-family housing business

Property
management

ES CON
Property Ltd.

ES CON

Diverse development
capabilities

Condominium
management

Condominiums

Single-family housing
construction

RetailHotels

Offices

Logistics

Securing stock revenues throughoperations management

ES CON
CRAFT Ltd.

New businessdomains

Apartments

HR placement

ES CON

ES CONGLOBAL WORKS
Ltd.

Asset Management

Public REIT

Single-family
housing subdivision

HOME Ltd.

Private REIT

Sale of permanent ossuary usage
rights(Ryomon)V. Management strategies(vi) Expanding facilities
Establishing facilities in the five
major urban areas
Hokkaido
BranchSuroy Mall Nagamine

Osaka Head
OfficeSeptember 1, 2020
Name changed

Securing priority negotiating rights as apartner company in the JR Kita-Hiroshima
Station West Area Revitalization Project

September 1, 2020
OpenedTokyo Head
OfficeKyushuBranchSeptember 2020
First condominium projectacquired(Ohashi, Minami-ku, Fukuoka)

March 1, 2019
OpenedNagoyaBranchProceeding with various
condominium projects,
including joint projects with
Chuden Real Estate

Establishing facilities in the five
major urban areas of Kanto,
Kansai, Chukyu, Kyushu, andHokkaido regions
Developing multifaceted realestate businesses centered on
major urban areas across Japan

Grand Le JADE
Shirakabe Getsuronotei

Grand Le JADE Shirakabe
Rinzennotei

V. Management strategies
Chubu Electric PowerGroup(vii) Synergies within the Chubu
Electric Power Group

Synergies through 2020
Promoting joint
projects

Five joint projects already underway with Chuden Real Estate
Four projects in the Chukyo area (Shirakabe, Shirakabe II,
Nishiichinomiya, Kakegawa)One project in the Kansai area (Suita-shi Fujishirodai 5-chome)

Mutuallycomplementarybusiness areas

Nagoya Branch opened in March 2019
Business development in both areas (Chubu, Kansai)

Making effective use ofreal estate owned by the
Chubu Electric PowerGroup

Joint project launched with Chuden Real Estate on real estate itowns in Ichinomiya, Aichi Prefecture

Joint research andimplementation of nextgeneration smart houses,
connected homes, etc.

Began development of next-generation complex in Suita-shi
Fujishirodai 5-chome (on the former site of the National Cerebral
and Cardiovascular Center) in joint project with Chuden Real
EstateProspective buyers
for our real estatedevelopment projects

Sale of properties owned by ES-CON JAPAN to Chuden Real
Estate based on the warehousing method (support contractconcluded in September 2019 involving three companies: Chuden
Real Estate, EJR, and ES-CON Asset Management)

Exchange ofhuman resources

Starting April 2019, two Company employees were seconded to
Chuden Real Estate. One person from Chubu Electric was named
director in March 2019.
Chuden Real Estate employees seconded to the Group for training

Further synergies achieved by becoming a consolidated subsidiary

Large-scale redevelopmentin urban centers andrailway station areas

Realizing newcommunity building

Large-scale community
development

V. Management strategies(viii) Promoting ESG initiatives
ESG management philosophy
Our IDEAL to REAL corporate message calls for the creation of a new culture by making ideals reality. Basedon this working slogan, as a lifeways developer committed to creating ideal modes of life that meet today'schanging needs, we will seek to build a sustainable society and achieve sustainable growth by addressing
social issues through our ESG initiatives.

Basic ESG policy
We strive to grow as a company needed by society by promoting ESG initiatives in strict compliance withlaws, regulations, and our pledges related to the environment, society, and self-governance.

E

Affordable andclean energy

Sustainable
cities andcommunities

Climate action

Life on land

1. Creating new environmental value through nextgeneration urban development and othermeasures to realize a carbon-neutral society by
2050
2. Promoting real estate development andcorporate activities that give full consideration to
the environment
3. Taking on the challenges of new businessdomains based on the key theme of theenvironment, thereby creating both
environmental value and business value

S

Good health andwell-being

Gender equality

Decent workand economic
growthPartnerships forthe goals

1. In addition to contributing to community vitality throughurban development, creating new futures by promoting
local community building
2. In addition to developing workplaces where employees
can demonstrate their abilities to the fullest while doing
rewarding work, promoting diversity to enable diverse
human resources to thrive
3. Supporting safe and comfortable lives in our many
communities by contributing to solutions to social
challenges posed by health and welfare, including low
birth rates and aging populations
4. Promoting business development to achieve SDGs on
a global basis through international businessdevelopment

G

Helping to build asustainable society
Peace, justice,and strong
institutions

1. Enhancing timely, appropriate, and fairdisclosure of management information
2. Promoting governance structures capable ofsecuring management stability, soundness, andtransparency
3. Enhancing risk management capabilities in
response to growing risks accompanying
business expansion and diversification
4. Pursuing business activities based on the
Corporate Ethics Charter and respect for thehuman rights of all

V. Management strategies(viii) Promoting
ESG initiatives

GRESB Real Estate Developer Assessment secured
ESDeveloper Assessment.
We will maintain our proactive efforts to improve these ratings into the future.

Goals of initiatives

E: Environment

G: Governance

S: Society

Contributing to decarbonization in partnershipwith the Chubu Electric Power Group

Enhancing disclosure of both financial andnonfinancial information

Community vitalization, local community creation
The tonarie series of neighborhood shopping centers developed by ESCON JAPAN are developed and operated as facilities with roots in thelocal communities, intended to be beloved and admired components oflocal communities.

In the Suita-shi Fujishirodai 5-chome Project (tentative name), a joint
next-generation urban development to realize a society founded onsafety, comfort, energy conservation, recycling, and coexistence withplants and nature.
In the future, we will strive to develop a data platform contributing to acarbon-free society through urban development partnership with the
Chubu Electric Power Group.

In addition to timely disclosures on our website and the annual General
Meeting of Shareholders, we strive to create opportunities for dialogue
with shareholders through briefings on financial results and individual IR
briefings in Japan and overseas.
In March 2020, in our Corporate Governance Report, we described theprocess of determining executive compensation by category. In April
2020, we added a page on ESG initiatives to our corporate website. We
strive to enhance disclosure to stakeholders.

area around the new stadium of the Hokkaido
Nippon Ham Fighters baseball team.
Through joint efforts in promoting athletics
and culture, we bring joy to and invigorate
communities.

Use of renewable energy

Enhancing and strengthening corporate
governance

Promoting an action plan based on the Act on
Advancement of Measures to Support Raising
Next-Generation Children

The LOGITRES Tojo logistics facility
incorporates solar panels. We will continue
to pursue eco-friendly development
utilizing renewable energy.

We shifted to the structure of a company with auditors in March 2016.
In January 2020, we established the Nomination and Remuneration
Advisory Committee. External directors account for the majority of themembership.
In January 2021, we appointed seven executive directors based on a
succession plan.
Plans call for independent external directors to make up a majority of
directors beginning in April 2021.
We plan to continue enhancing and strengthening corporate governance.

We support our employees in their efforts to balance work and family life
through assistance with childcare and long-term care and other means.
We plan to further initiatives to create workplaces where diverse humanresources can thrive.

Promoting development of ZEH-M and othereco-friendly condominiums

Promoting support for people with cognitive
illnesses

Le JADE Okurayama, completed in
November 2020, was our first project
selected for the high-rise ZEH *1-M
support project.
We will continue to promote thedevelopment of eco-friendly condominiums.

At tonarie Seiwadai, a facility operated by theGroup, all tenants undergo training courses
required to support people with cognitive
illnesses. The facility has been named by the
Hanshin Kita Community Center as a businessthat supports people with cognitive illnesses.

Adoption of environmental management system

Risk management
With regard to the risks of the development business, through weekly
Head Office conferences between directors and section heads and otheractivities, we check on the details of all business risks and set policies forresponse. Risks across the organization and information-sharing
companywide is assessed through weekly Risk Management Committee
meetings to ensure timely sharing of information and effective decisionmaking on response policies regarding diverse risks, including compliance,
legal, labor, and safety management risks.

We support safe and comfortable lives for everyone in the community;
other retail facilities operated and managed by the Group deploy similar
activities.

On May 25, 2020, we secured Eco Action 21
certification. Eco Action 21 is a Japaneseenvironmental management system (EMS)
established by the Ministry of the Environmentof Japan. We will continue to strive to reduce
CO2 emissions at retail facilities developed andoperated by the Group.

Respect for human rights

Proactively contributing and giving back to society

Through training on prevention of harassment and discrimination andother measures, we carry out business activities based on respect for therights of employees and all other stakeholders.

We donate to the Sugiyama Research Foundation*2 and Kyoto
University's iPS Cell Research Foundation*3. We will continue advancing
efforts to support solutions to social challenges.

*1 A ZEH (net zero-energy house) is a structure that seeks to achieve zeroconsumption of primary energy over the course of the year through exterior
insulating performance and other factors and the adoption of high-efficiency
equipment and systems, thereby realizing large-scale energy savings while
maintaining interior environmental quality and adopting renewable energy sources.

*2 Research foundation supporting the promotion of theWT1 cancer vaccine and development of a WT1cancer preventive vaccine advanced by Special
Professor Haruo Sugiyama of the Osaka University
Graduate School of Medicine*3 Research foundation at the Kyoto University Center
for iPS Cell Research and Application (led by Prof.
Shinya Yamanaka) that pursues possibilities for andmedical applications of iPS cells

V. Management strategies(ix) Returns to shareholders (dividend policy)
Continuation of progressive dividend policy-CON JAPAN announced a review of the progressive dividend policy (a dividend policy that sets theer only-CON JAPAN has decided tomaintain this progressive dividend policy from FY2020 and beyond.

During the period of this Medium-term Management Plan, ES-CON JAPAN plans to maintaindividends of at least 38 yen per share.
Trend in dividends

2016

2017

2018

2019

2020

2021

2022

2023

38 yenor more38 yenor more%%Dividend per share

15 yen18 yen32 yen36 yen38 yen38 yenor morePayout ratio

25.5%

22.0%

30.2%

30.2%

33.9%

%

Dividends per share

33.9%

Payout ratio

30.2%
25.5%

30.2%

22.0%

32 yen15 yen18 yen

2016
2016

2017
2017

2018
2018

36 yen38 yen38 yenormore

38 yenormore

38 yen
or
more

2019
2019

2020
2020

2021
2021

2022
2022

2023
2023

INFORMATIONESCON Japan Ltd.
Email: ir@escon.jp
Tokyo
20th Floor, Okura Prestige
Tower, 2-10-4 Toranomon,
Minato-ku, Tokyo
+81-3-6230-9308

Osaka
13th Floor, Meiji Yasuda Seimei
Building, 4-1-1 Fushimimachi,
Chuo-ku, Osaka+81-6-6223-8055

ESCON JAPAN Official
Instagram, Facebook

Forward-looking statements contained in this document reflect judgments based on information available
at the time of publication.
Actual results may differ due to various factors.